SECP introduces Passive Equity Sub-Fund under VPS from Jan 2027

The Securities and Exchange Commission of Pakistan has created a Passive Equity Sub-Fund under the Voluntary Pension Scheme, according to Mettis Global. Pension fund managers must offer the new option starting January 1, 2027, alongside the current Equity, Debt and Money Market sub-funds. The product lets savers put money into funds that mirror a chosen market index alongside actively managed equity funds.

Managers can run the sub-fund either by tracking an index directly or by buying equity ETFs listed on the PSX, which spread holdings across the market. ETF-based sub-funds carry a management fee ceiling of 0.75% a year. Where a manager holds ETFs run by its own asset management company, no second management charge applies.

SECP Chairman Dr. Kabir Ahmed Sidhu described the move as a way for savers to gain more choice and a lower-cost route into equities. He added that the step is meant to broaden enrolment in voluntary pensions and to build long-horizon retirement savings. The regulator presents the change as one step toward wider and cheaper investment options in Pakistan's voluntary pension system.